The European Commission's (EC) competition committee today issued a statement setting for its view that Google Inc. (NASDAQ: GOOG) engages in anti-competitive behavior by seeking an injunction against Apple Inc. (NASDAQ: AAPL) related to certain "standards essential" patents that Google inherited when it acquired Motorola. This is a preliminary ruling and does not necessarily mean that the EC will rule in Apple's favor. But the ruling does indicate which way the wind is blowing.
Under EC rules, if a company is willing to pay a fair and reasonable price to license essential technology (Apple, in this case), the owner of that technology (Google) may not seek an injunction prohibiting the potential licensee from obtaining the right to use the technology. In a memo released today, the EC's competition chairman, Joaquin Almunia, said:
When [the GSM] standard was adopted in Europe, Motorola Mobility gave a commitment that it would license the patents which it had declared essential to the standard on [fair and reasonable] terms. Nevertheless, Motorola Mobility sought an injunction against Apple in Germany on the basis of a [standards essential patent] and, after the injunction was granted, went on to enforce it, even when Apple had declared that it would be willing to be bound by a determination of the [fair and reasonable] royalties by the German court.
The EC also noted, "The Commission is concerned that the threat of injunctions can distort licensing negotiations and lead to licensing terms that the licensee of the [standards essential patent] would not have accepted absent this threat. This would lead to less consumer choice."
The EC's memo is available here.
Filed under: 24/7 Wall St. Wire, Consumer Electronics, International Markets, Law Tagged: AAPL, GOOG